Financial Services and Markets Act 2000
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The Financial Services and Markets Act 2000 (FSMA) is an Act of the Parliament of the UK that provides the legislative framework for the regulation of financial services and markets in the UK. It is a comprehensive piece of legislation that sets out the regulatory regime for various financial activities and establishes the key regulatory bodies responsible for overseeing the financial sector.
The FSMA aims to promote the stability, integrity, and protection of the UK financial system, as well as the fair treatment of consumers. It encompasses a wide range of financial activities, including banking, investment services, insurance, and securities trading.
Regulatory bodies: The Act establishes the Financial Conduct Authority and the Financial Conduct Authority as the main regulatory bodies responsible for supervising and regulating financial institutions and markets in the UK. The Financial Conduct Authority focuses on conduct regulation and consumer protection, while the Financial Conduct Authority is responsible for prudential regulation and the stability of financial institutions.
Authorisation and regulation: The FSMA sets out a framework for the authorisation and regulation of financial services providers. It requires firms and individuals engaged in regulated activities to obtain authorisation from the relevant regulatory authorities, comply with specified regulatory requirements, and adhere to conduct standards.
Market abuse and insider dealing: The Act introduces provisions to tackle market abuse and insider dealing, aiming to prevent unfair trading practices and maintain market integrity. It defines prohibited behaviours, establishes disclosure obligations, and empowers regulators to investigate and take enforcement action against offenders.
Consumer protection: The FSMA includes provisions to protect consumers of financial services. It establishes requirements for fair treatment of customers, transparency in the provision of financial products and services, and mechanisms for redress and compensation in cases of misconduct or financial loss.
Supervision and enforcement: The Act gives regulatory authorities powers to supervise regulated firms, conduct investigations, and enforce compliance with regulatory requirements. It provides mechanisms for imposing penalties, sanctions, and disciplinary actions against firms and individuals who breach regulatory obligations.
Regulatory oversight of exchanges and clearing houses: The FSMA provides for the regulation and oversight of financial market infrastructure, including exchanges, clearinghouses, and settlement systems. It aims to ensure the stability and efficiency of these systems.
The FSMA has been amended and updated considerably by the Financial Services Act 2012 and the Bank of England and Financial Services Act 2016 to address evolving regulatory needs and align with international standards. It is a cornerstone of financial regulation in the UK, playing a crucial role in maintaining the integrity and stability of the financial sector and protecting consumers.
The FSMA aims to promote the stability, integrity, and protection of the UK financial system, as well as the fair treatment of consumers. It encompasses a wide range of financial activities, including banking, investment services, insurance, and securities trading.
Regulatory bodies: The Act establishes the Financial Conduct Authority and the Financial Conduct Authority as the main regulatory bodies responsible for supervising and regulating financial institutions and markets in the UK. The Financial Conduct Authority focuses on conduct regulation and consumer protection, while the Financial Conduct Authority is responsible for prudential regulation and the stability of financial institutions.
Authorisation and regulation: The FSMA sets out a framework for the authorisation and regulation of financial services providers. It requires firms and individuals engaged in regulated activities to obtain authorisation from the relevant regulatory authorities, comply with specified regulatory requirements, and adhere to conduct standards.
Market abuse and insider dealing: The Act introduces provisions to tackle market abuse and insider dealing, aiming to prevent unfair trading practices and maintain market integrity. It defines prohibited behaviours, establishes disclosure obligations, and empowers regulators to investigate and take enforcement action against offenders.
Consumer protection: The FSMA includes provisions to protect consumers of financial services. It establishes requirements for fair treatment of customers, transparency in the provision of financial products and services, and mechanisms for redress and compensation in cases of misconduct or financial loss.
Supervision and enforcement: The Act gives regulatory authorities powers to supervise regulated firms, conduct investigations, and enforce compliance with regulatory requirements. It provides mechanisms for imposing penalties, sanctions, and disciplinary actions against firms and individuals who breach regulatory obligations.
Regulatory oversight of exchanges and clearing houses: The FSMA provides for the regulation and oversight of financial market infrastructure, including exchanges, clearinghouses, and settlement systems. It aims to ensure the stability and efficiency of these systems.
The FSMA has been amended and updated considerably by the Financial Services Act 2012 and the Bank of England and Financial Services Act 2016 to address evolving regulatory needs and align with international standards. It is a cornerstone of financial regulation in the UK, playing a crucial role in maintaining the integrity and stability of the financial sector and protecting consumers.
